Kindle Fire - All posts tagged Kindle Fire

Following rumors today that Amazon.com (AMZN) plans a version of its “Fire” tablet computer selling for $50 this holiday season, and expectations Apple (AAPL) may unveil a larger version of its iPad tablet tomorrow, during a media event in San Francisco, CNBC’s Closing Bell with Bill Griffeth and Kelly Evans hosted a discussion that included RBC Capital’s Amit Daryanani and Wedbush Securities’s Michael Pachter.

Pachter, who has a Buy rating on Amazon shares, and a $700 price target, nevertheless made the case that a cheaper tablet may help Apple in the longer run.

“This guy has no humility,” Pachter said of Amazon CEO Jeff Bezos, given Bezos’s willingness to pursue projects regardless of how sensible other people think it may or may not be.

The Wall Street Journal’s Greg Bensingerwrote yesterday that “the Seattle online retailer plans to release a $50 tablet with a 6-inch screen, in time for this year’s holidays,” citing multiple unnamed sources.

“Yes, they are coming at this from opposite ends,” said Pachter of Amazon and Apple’s respective efforts. “I actually think it could help Apple. Because more kids will get a tablet for the holidays, in middle class families,” said Pachter, thus bringing more future consumers into the tablet fold.

Chinese e-commerce giant Alibaba Group Holdingpriced its IPO, set to get under way tomorrow morning, at $68, the high end of an announced range of $66 to $68, which was raised on Monday from the prior range amidst apparently very strong demand.

Elsewhere in software land, shares of database giant Oracle (ORCL) slipped 70 cents, or 1.7%, in late trading, to $40.85, as the company reported fiscal Q1 results that missed analysts’ expectations, and a weak outlook for this quarter, and said founder and CEO Larry Ellison will give up the CEO spot to his two deputies, Safra Catz and Mark Hurd, and become chairman and CTO.

Amazon.com (AMZN) shares closed up $1, or 0.3%, at $325, after the company received positive initial remarks from the tech press about new models of its Kindle e-book reader and of its “Kindle Fire” line of tablet computers. Nevertheless, Piper jaffray‘s Gene Munster, a bull on the stock, questioned why Amazon continues to invest in hardware products when in his view they should just deliver services to all mobile devices.

Speaking of Amazon, RBC Capital Markets‘s Mark Mahaney reiterated an Outperform rating, and raised his price target to $435 from $380, citing favorable feedback from a survey of users of the same-day delivery service the company began to expand starting in May.

Shares of Tibco Software (TIBX) declined 96 cents, or almost 5%, to $19.80, after the company missed both fiscal Q3 expectations and the outlook for this quarter.

Software vendor Red Hat‘s (RHT) shares declined $1.60, or 2.6%, to $59.06, in late trading, despite the company beating fiscal Q2 expectations. The Q3 revenue forecast was short of consensus, but the company slightly raised its year view.

Qualcomm (QCOM) stock closed up 61 cents, or 0.8%, at $76.44, after Ericsson (ERIC) announced it would exit the baseband modem chip business, eliminating a second competitor for Qualcomm in just three months after Broadcom (BRCM) folded up baseband operations in June.

Nomura Equity Research‘s Anthony DiClemente reiterated a Buy rating on on shares of Google (GOOGL), and a $675 price target, based on a bright outlook for growth and profit at the company’s YouTube video unit.

Speaking of Google, Shares of display technology maker Himax Technologies (HIMX), which has partnered with Google, got a lift toward the end of the trading day, rising 21 cents, or 2.4%, to $8.91, after word circulated of positive remarks by the trading desk at boutique firm Northland Securities.

Analyst Thomas Sepenzis responded to my inquiry, saying he had not published anything. But a copy I obtained from one source contains remarks from Northland saying Sepenzis has heard that Google will pick Himax technology over a competing offering from Samsung Electronics (005930KS) that failed to meet Google’s requirements.

According to the remarks I’ve seen, the desk said “Tom would aggressively own HIMX at these levels due to his belief the Sept Q will be better than current consensus.”

Raymond James’s Tavis McCourt today updates the landscape of tablet computing with the results of a survey of 500 individuals in the U.S. his firm commissioned between March 13th and 17th, regarding their preferences on the devices.

Apple’s (AAPL) iPad, he finds, still rules the roost, relative to Amazon’s (AMZN) Kindle devices, Microsoft’s (MSFT) “Surface” machine, and various tables running Google’s (GOOG) with 35.5% share of tablets according to respondents’ comments on what device they have:

The following chart highlights the modest but consistent growth in tablet penetration that we have seen during the 18 months since we began asking respondents about their current tablet ownership. Over this period, tablet penetration has risen from roughly 46% to roughly 61%. The number of respondents reporting that they do not own a tablet has dropped from 54.1% in September 2012 to 39.5% today. iPad continues to dominate market share in our survey, with those reporting ownership of an iPad at 35.5%, up from 31.8% y/y and down slightly from 37.1% in December. Coming in second, Android/Google was 14.2%, down from 16.3% y/y but up from 11.2% in December. Amazon Kindle Fire share has maintained a narrow range from ~8-11% over the 18-month period, up to 11.4% from 11.2% y/y and 10.6% sequentially. Microsoft/Windows 8 tablet share remains in last place, coming in at 4% this quarter, its first time reaching the 4% level during our survey period, besting a previous high of 3.8% in September 2012.

Here’s his chart of the changes since 2012 in tablet ownership and brand share:

Happily, the number of people intending to buy tablets has reversed a declining trend, he writes:

After a clear trend where the percentage of respondents intending to use a tablet in the future was converging towards a similar percentage of those that already owned a tablet (i.e., a mature market), the trend has reversed over the last two quarters, rebounding to a high of 12.6% in December 2013 and coming in at 10.2% this quarter. Essentially, there are an increasing number of consumers that a year ago indicated they had no intention of purchasing a tablet, who today intend to. That is good news for tablet industry growth broadly.

McCourt offers the following dual slides to show that “iPad will remain dominant in North American consumer market for some time,” as he sees it, based on stable market share and stable buying intent from respondents.

He thinks “Microsoft Surface price points may get many of these potential Microsoft buyers to ultimately choose an Amazon or Android/Google tablet instead,” and that “With Microsoft’s announcement that it is bringing Office to the iPad, we believe it will be more difficult to ramp sales of its Surface product line and Windows tablets broadly.”

Amazon (AMZN) shares are up $15.29, or almost 5%, at $347.50, in late trading, after the company reported Q3 results that beat analysts’ estimates, but forecast this quarter’s revenue slightly below consensus.

The company said it lost 9 cents a share on revenue of $17.09 billion.

Analysts were expecting the company to report an operating loss of 11 cents a share, on revenue of $16.7 billion.

This marks the third consecutive quarterly loss for Amazon, despite rising sales; the stock jumped to record levels after its second-quarter miss in July.

CEO Jeff Bezos remarked that the company added millions of new members for its “Prime” service, which includes free shopping and things such as steaming video downloads that compete with Netflix‘s (NFLX) service. Bezos said the company had “brought online” 8 million square feet of new fulfillment center capacity, and that the company was hiring 70,000 temporary workers for the holidays.

He also touted the introduction in the quarter of new models of the company’s Kindle e-readers and Kindle Fire tablet computer. And Bezos said the company’s Amazon Web Services cloud computing operations had gotten “back to work” on a “large government contract,” obviously a reference to the shutdown this month of the U.S.government.

For the all-important fourth quarter, Amazon said it expects revenue of $23.5 billion to $26.5 billion, with a midpoint just below the $25.9 billion in revenue the Street is expecting.

Shares of Amazon.com (AMZN) are up 8 cents, at $314.21, after the company announced new models of its “Kindle Fire” line of tablet computers. The new models, a 7-inch and an 8.9-inch version of the “Fire HDX,” with a beefed-up processor and memory, battery life, and screen display, for $229 and $379; and a simpler model, the existing Fire HD, with some improved specs, for $139, less than the original $199 price. Note that those prices are for 16-gigabyte storage configurations, and they assume the user is willing to look at ads, or “special offers,” as Amazon terms them. Removing the ads bumps up the price of the 7-inch HDX to $244.

The models become available starting October 2nd for the HD, and October 18th and November 7th for the smaller and larger models of the HDX, respectively. Amazon said it has added some new features, such as a “Mayday Button,” in the HDX, which connects the user to free 24/7 technical support.

Amazon also touts a new release of its adaptation of Google‘s (GOOG) Android operating system, the “Fire OS.” It offers the ability to run any Android application, the company says.

The HDX will be available in models that include 4G cellular data connections, for $329 and $479, respectively.

RBC Capital‘s Mark Mahaney, who has an Outperform rating on the shares, is positive on the new models, pointing out that they lead to follow-on media sales, which, combined with hardware, is becoming a very large part of Amazon’s revenue:

We view the new Kindle Fire HDX product launch and the Kindle Fire HD product refresh to be rational steps for Amazon, as new lower priced introductory options and increased functionality open the Kindle family up to a wider audience. These steps also are in sync with Amazon’s strategy to sell devices at close-to-cost prices, generating significant profits off of incremental media – and other – segment sales via the devices. As one supporting dpoint, Kindle buyers purchase 4x the amount of books from Amazon (physical and digital) after buying a Kindle. The Kindle has become powerful enough as a book selling channel to help enable to best-selling book of all time (and we don’t mean Harry Potter) to achieve that status in such a short time. Although there is no disclosure, we would estimate that Amazon is also seeing a 1x to 2x increase in music and video unit sales per Kindle Fire purchaser. All in, we believe that Kindle Ecosystem sales are contributing more than 10% of AMZN’s total revenue.

Topeka Capital Markets‘s Victor Anthony is even more bullish than Mahaney, writing that “we believe the specs and features offer a compelling economical alternative to iPads,” and noting that the the 7-inch HDX in 16-gigabyte capacity “undercuts the iPad Mini by $100.”

“Amazon is well on its way to effectively replicate Apple‘s (AAPL) business model,” he declares.

Anthony goes through what he views as the “new cool features” of the devices:

(1) Amazon provides on-screen live video tech support with the Mayday feature that can co-pilot the user through any feature by drawing on the screen. The user can see the tech support person but the tech support person cannot see the user; (2) wirelessly beam or cast content on the Kindle HDX device to a TV using a certified Miracast-enabled accessory or TV. Hopefully this will be available on Google’s Chromecast. There is also a Second Screen app that turns the user’s TV into the primary screen, freeing the Kindle Fire for other functions while the user watches a movie. Second Screen will be available starting in October for PlayStation 3 and Samsung TVs, and later this year for PlayStation 4; (3) users can download Prime Instant Video movies and TV shows to their device, the only online video service in the U.S. that allows this. Way cool; (4) a built in Office suite for word, Excel files (5) Goodreads integration – see what friends are reading, rate books, etc.

Amazon.com (AMZN) shares are up $1.42, or half a percent, at $315.55, after the company announced two new models in its “Kindle Fire” line of tablet computers, the “Fire HDX,” with 7-inch and 8.9-inch displays with beefed up chips, memory and battery life, for $229 or $379, and a $139 model, a slimmer, lighter version of the prior “Fire HD” model. The Fire HD becomes available October 2nd, the HDX, on October 18th and November 7th for the smaller and larger model, respectively.

Amazon CEO Jeff Bezos did an extended interview with CNBC tech reporter John Fortt this morning to discuss the devices.

Topeka Capital Markets‘s Victor Anthony, who has a Buy rating on the shares, and a $350 price target, this morning writes that we believe the specs and features offer a compelling economical alternative to iPads,” adding “Amazon is well on its way to effectively replicate Apple’s business model.”

Speaking of Amazon, BB&T Capital Markets‘s Anthony Chukumba this morning reiterates a Buy rating on competitor Best Buy (BBY), writing that his recent comparison of pricing of various goods between the two retailers is giving him hope that Best Buy is “improving its value proposition.”

“With the notable exception of accessories, Best Buy’s prices are largely in line with those of Amazon, and in some cases were actually lower. Excluding accessories, Best Buy’s prices were 3.7% m

Topeka’s Anthony was a busy fellow this morning. He also penned a note about Twitter‘s head of brand advocacy, Melissa Barnes, and her appearance at the Advertising Week conference. Barnes, writes Anthony, told attendees about a number of factoids regarding Twitter’s reach: “According to her, 70% of Twitter’s 400 million unique visitors access the site on mobile, and users send one billion Tweets every two days.”

“Other stats include 65% of users are on Twitter while watching TV, and 40% of all Twitter traffic around peak time is about TV.”

Twitter, of course, is gearing up for an IPO. In case you missed it, Kara Swisher of AllThingsDlast night had a nice roundup of tidbits about the company’s secretive IPO prospectus, which actually was filed not in August, when the company tweeted it, but back in the middle of July.

Shares of Facebook (FB) are up 25 cents, or half a percent, at $48.68, as the thumbs-up trend continues: Canaccord Genuity’s Michael Graham initiated coverage of the stock with a $60 price target, writing that “While the US is close to saturation, Facebook’s global penetration currently stands at only ~20% and we believe there is still room for user growth.”

“Facebook already has nearly 1.2 billion monthly users, but we believe the user base can grow by roughly one-third by 2015.”

The drama continues for BlackBerry (BBRY) as its suitor, Fairfax Financial Holdings, is seeking partners to help it take the company private. The Globe & Mail‘s Jacquie McNishthis morning writes that Fairfax is soliciting $1 billion in equity investments from institutional investors to support its $4.7 billon bid. McNish writes Fairfax head Prem Watsa is personally making calls to leading Canadian and U.S. pension and private equity funds, citngin multiple unnamed sources.

Chip maker Cypress Semiconductor (CY) continues to be under pressure following a 16% drop yesterday after cutting its outlook and warning of weakness in business from some mobile device customers. The shares are down 19 cents, or 2%, at $9.46.

Wedbush‘s Betsy Van Hees this morning cut her rating on the shares to Neutral from Outperform, and cut her price target to $10 from $14, writing that the company is “once again back in the penalty box for what we think this time could be for an extended stay of at least a couple of quarters.”

Shares of Apple (AAPL) are down $3.72, or 0.9%, at $424, a little less than the broader market’s decline, but close to the stock’s 52-week low of $419.

Cowen & Co.’s Matthew Hoffman today reiterates an Outperform rating on the shares, arguing results can be slightly better this quarter than expected, in part because iPad trends seem positive.

Hoffman is modeling $40.6 billion in revenue for the June quarter, and EPS of $10.03, above the consensus of $39.38 billion and $9.28. He expects sales of 21.7 million iPads and 31 million iPhone units.

Hoffman offers data from a survey his firm commissioned of U.S. household attitudes toward the iPad, with 1,079 respondents, last month, which showed 40% of the households responding having an iPad, 35% the normal version, 5% the mini version.

Hoffman thinks that leaves upside for Apple in tablet shipments:

Given the U.S. penetration rate for tablets lags substantially the penetration rates of traditional PCs (>90%) or mobile phones (>100%) and the tablet category itself is still in its infancy (the iPad itself is just three years old!), we continue to see ample room for Apple to grow its iPad franchise through the continued displacement of traditional PC use cases and increasing iPad household penetration. Though we do expect an iPad refresh later this quarter, we do not expect iOS 7.0 to ship on the device if it debuts before June’s WWDC.

Hoffman notes 41% of respondents indicated an intention to purchase an iPad in either flavor, down from 43% in October. “We acknowledge that some of the leading [Google (GOOG)] Android OEMs have made strides in converging key features and functions of tablets and smartphones (e.g. Samsung’s Galaxy Note family) but note that Apple’s iPad and iPhone remain the leading domestic tablet and smartphone by OEM market share.”

Almost a third, 27%, said they intended to buy the regular iPad, 14% the iPad mini. The third most-discussed device was Samsung Electronics‘s (005930KS) “Galaxy Tab” line of tablets, with Amazon.com‘s (AMZN) “Kindle Fire” in fourth place.

Lastly, Hoffman adds a parenthetical note about the iPhone: “Further, our checks continue to suggest that Apple’s next flagship iPhone (iPhone “6”) will come equipped with a 5.5” to 6” display – and that it will arrive by late C13/early C14.”

Research firm Canalysthis morning offers an update on its approach to the personal computer market, in which the firm departs from other market observers by counting Apple‘s (AAPL) iPad as effectively a personal computer; other firms such as Gartner and IDC separate tablets as distinct from their PC quarterly estimates.

Canalys’s method means “one in six PCs shipped in Q4 2012 was an iPad,” they write, giving Apple the leading position in the PC market, in the firm’s view, in Q4.

Out of a total of 134 million PC units shipped in Q4, including both traditional PCs but also tablets, “Apple continued to lead the PC market, shipping 27.0 million units and taking its share over 20% for the first time. Hewlett-Packard (HPQ) shipped 15.0 million PCs, beating Lenovo (LNVGY) by 200,000 units to regain second place, with both vendors taking an 11% share.

In Canalys’s view, laptop computers “continued to falter,” with unit shipments flat, year over year, while “The pad segment, however, grew 75% to 46.2 million units, with full-year shipments totaling 114.6 million units,” referring to tablet computers.

Apple’s iPad sales were probably driven by the mini version, though it lost control of the majority of tablet sales for the first time:

Apple’s growth in the pad segment was driven by strong demand for the iPad mini. Its overall shipments, however, were hampered by supply issues. Canalys estimates that the mini made up over half of Apple’s total pad shipments, with its attractive price point and compact design leading to significant cannibalization in the iPad range and wider PC market. Despite record shipments, Q4 saw Apple’s pad share dip to 49%, becoming the first quarter it has not controlled over half the market. ‘Apple timed the launch of the iPad mini well,’ said Pin-Chen Tang, Canalys Research Analyst. ‘Its success proves there is a clear demand for pads with smaller screens at a more affordable price. Without the launch, Apple would surely have lost more ground to its competitors.

Amazon.com (AMZN) may have shipped 4.6 million units of its “Kindle Fire” tablet, the company thinks. Samsung Electronics (005903KS) and Google (GOOG) probably put pressure on Amazon in the U.S. market, with their Galaxy Tab and Nexus 7 devices, causing sales to decline here even as the company expanded overseas, Canalys thinks.

As for Microsoft‘s (MSFT) Surface tablet, the firm states simply, “Microsoft struggles with pads – only 3% of pads shipped in Q4 2012 used a Microsoft operating system.”

“The software giant’s entry into the PC hardware market was something of a non-event.”

In case you missed it, market research firm IDC this afternoon reported that shipments of tablet computers in Q4 rose by 75%, year over year, to 52.5 million units, and 74% from Q3′s level, meeting the firm’s expectations for a “very strong quarter.”

Apple‘s (AAPL) iPad saw its share of tablet sales fall from 52% a year earlier to 43.6%, even though its unit volume rose by 48% to 23 million units. Samsung Electronics (005930KS) passed Amazon.com (AMZN) for the number two spot, with 7.9 million units and 15% share, a volume increase of 263%.

Amazon’s own shipments of the Kindle Fire Tablet, which Amazon this week said it was its best-selling product in Q4, again, probably totaled 6 million units, IDC estimates. (Amazon declines to disclose unit shipment numbers.) That gave Amazon 11.5% share, down from 15.9%, on a 27% rise in volume. And in fourth place, Asustek Computer (2357tw) had the strongest increase of any vendor in the top ranks, with shipments up 402% at 3.1 million units.

Amazon.com (AMZN) this afternoon reportedQ4 revenue and earnings per share that missed Street estimates, and forecast this quarter’s revenue lower as well.

Revenue in the three months ended in December rose 22%, year over year, to $21.27 billion, yielding EPS of 21 cents.

Analysts had been modeling $22.26 billion and 28 cents a share.

CEO Jeff Bezos remarked, ““We’re now seeing the transition we’ve been expecting. After 5 years, eBooks is a multi-billion dollar category for us and growing fast – up approximately 70% last year.”

“In contrast, our physical book sales experienced the lowest December growth rate in our 17 years as a book seller, up just 5%. We’re excited and very grateful to our customers for their response to Kindle and our ever expanding ecosystem and selection.”

The company said its Kindle Fire HD was once again the best-selling item of all items during the quarter, without disclosing unit sales:

For the second year in a row, Amazon’s tablet was the most popular item for customers – Kindle Fire HD continued its run as the #1 best-selling, most gifted, and most wished for product across the millions of items available on Amazon worldwide. At year-end, Kindle Fire HD, Kindle Fire, Kindle Paperwhite and Kindle held the top four spots on the Amazon worldwide best seller charts since launch.

For the current quarter, the company sees revenue in a range of $15 billion to $16 billion, below the consensus for $16.9 billion.

The company expects operating income in the quarter to decline from $192 million in the year-earlier period to a range of negative $285 million to positive $65 million, it said.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.